My second introduction to the “start-up” advantage was with Cerent.  We started as “Fiberlane”, imploded and became several companies.  It was only the second tech company I had worked for, and the stories along the way highlighted why startups are able to take fewer people and less money to build something that, at times, leapfrogs the other larger firms out there.

Scarcity is Temporary

When they started as “Fiberlane” they were all free to design a product the way they wanted.  This allowed the engineers to leverage components that were barely available.  They would be gambling that the parts would be available when we went into production and that the prices would be such that they’d make economic sense.  This allowed them to be creating what was truly leading edge networking gear.  I can still remember the excitement when certain “samples” or “prototypes” would show up.  The engineers were beyond giddy, playing with technology they could have only imagined a year or two prior.

“Switch ’em ’til they glow” –Fiberlane internal mantra

Lost Development is Permanent

In the end Cisco purchased the Cerent part for $7.3B, counting their initial investment.  This was where one of the interesting lessons surfaced.  Cerent was allowed to complete their plans for the 15454.  But when they started in on the next project they had to follow Cisco internal guidelines.  Those guidelines included that they could only design with parts that had availability at production levels.  Even then there were considerable delays between when a component had samples available and when production had ramped up enough sustain manufacturing in volume.  This might explain why Cisco has acquired more than 200 companies.

What components are you locking your engineers into?  It can extend beyond hardware components.  Do you require them to work with older languages?  Older web architectures?  There are risks to leading edge, but there are also trade-offs.  Be sure that you understand those trade-offs.  Being agile and nimble avoids tech debt that hinders larger/older firms.